Trump supporters suffer significant losses on Ukraine's bonds, Bloomberg
Photo: Investors are losing money on Ukraine's Eurobonds (Getty Images)
Ukraine's dollar bonds have brought investors losses of over 10% in 2025. This is the worst performance among emerging markets, informs Bloomberg.
According to the agency, buying Ukraine's bonds was one of the most popular trades in emerging markets, driven by the anticipated return of Donald Trump to the White House.
However, the bonds are declining in value as the prospects of Trump fulfilling his promises and acting as a mediator in securing a peace deal are becoming increasingly unlikely.
This marks a dramatic reversal compared to their success at the beginning of the year when hopes for a ceasefire made Ukrainian debt a top performer. The value of some bonds nearly doubled after a restructuring in August. Peace-related bets lifted markets across Eastern Europe.
"The market is back around levels seen before Trump’s election," said Viktor Szabo, an investment director at Aberdeen Investments. "The promise to deliver peace a day after inauguration was met by the reality that Putin doesn’t want peace."
Ukraine's dollar bonds have repeatedly ranked among the worst performers in emerging markets in recent weeks. Bonds maturing in 2035, with future payouts linked to Ukraine’s economic performance, were trading just above 50 cents on the dollar - down from about 70 cents in February - pointing to deeper issues.
"The main impact of the delays in peace talks has obviously been seen in Ukraine sovereign bonds," said Martin Bercetche, a portfolio manager at Frontier Road. “An investment in those bonds is predicated on some sort of ceasefire or resolution to the fighting."
Eastern Europe's success
Meanwhile, the reasons for the reversal in Ukraine's bond market also explain why exchanges from Warsaw to Budapest have seen some of the biggest gains in the world.
Initially, assets in the eastern EU were supported by hopes for a peace deal that would bring stability and more investment to the region.
Later, the possibility that Trump would limit military support to Europe and withdraw from the peace process prompted Germany and other governments to take action. The hundreds of billions of euros they pledged for defense spending lifted markets across Eastern Europe, fueling bets that their economies would benefit.
Major stock indexes in Warsaw, Prague, and Budapest have returned over 30% to investors this year in dollar terms. The Hungarian forint, Czech koruna, and Polish zloty are among the top-performing emerging market currencies against the dollar in 2025.
The Kremlin continues to dampen hopes for progress. On Friday, Russian officials rejected Trump's proposal to hold peace talks in the Vatican.
Trump stated he is considering new sanctions against Russia after Moscow carried out deadly missile and drone strikes across much of Ukraine for the second night in a row.
